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Ron Caruthers Profile picture
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15 Sep, 5 tweets, 1 min read
1. The word 'mortgage' literally means 'death pledge' from old French and Latin.

However, that isn't necessarily a bad thing because this is the ONE time that inflation works for you rather than against you.

How so?

Because you're locking in a rate in today's dollars.
2. But inflation dictates that you will have increasing income against a fixed cost (the mortgage).

Further, @themotleyfool used the Bureau of Labor Statistics data a few years ago to determine that the average mortgage decreases the older you are.
3. In their calulations,

the average 35-44 year old had a $1,073 monthly mortgage,

vs the average 75+ year old, that had a mortgage of only $447 a month.

Why the difference?

Because with a mortgage, you're locking in your payment today for the future.
4. So that payment will 'feel' like less over time.

Meanwhile, the math supports that if you take the money you WOULD spend on trying to pay that mortgage down and invest it, you will end up in a much better position later.

Plus you retain control of your money.
5. So don't be scared of making a 'death pledge' when it comes to where you live.

/end.

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More from @roncaruthers

Ron Caruthers Profile picture
17 Sep
1. Business tip:

'How are your socks and underwear?'

I briefly worked at Nordstroms after getting fired from a 5 star French restaurant back in the 80's before I went back to school

I needed a job, and I knew somebody, so there I was.
2. Nordstroms is ALL about sales and how much you sell, and I was always in the top 3 for my department, which was Men's Furnishings....so, shirts, ties, belts, braces (fancy speak for suspenders...it was the 80's, so those were in) etc.

How'd I do it?

Easy.
3. I asked every customer after they figured out what they wanted how their sock and underwear drawer looked.

And, about half the time (!!!) they would say 'Oh, YES! Thanks, man. I need to get some more of those.'

Reminds me of the last time I went to BevMo.
Read 6 tweets
Ron Caruthers Profile picture
10 Aug
1. How to Strategically Convert Your Traditional IRA or 401K to a Roth IRA Part TWO:

In part one, I explained the difference in how Roth and Traditional IRA's work both in the way they are taxed and what those taxes look like.

If you missed it, you can read it here:
2. So now, let's assume you want to convert, what is the best way to do that?

I'll give you 3 strategies to keep in mind.:

Here you go:

First, there is the Tax Capacity Method:
Read 23 tweets
Ron Caruthers Profile picture
6 Aug
1. Interesting fact: When the 4% Rule was originally published by Bill Bengen, he came up with that using a portfolio of 60% bonds, and 40% stocks.

If you're not familiar with the 'rule', it simply states that if you retire at 65 with a balanced portfolio (described above)...
2. If you withdrew 4%, you would 'never' run out of money.

BUT, there are 2 fairly fatal flaws with that math these days, although it was valid at the time.

First, in the 1990's and prior, bonds paid 6-8% on average.

Second, average life expectency was mid 70's for most.
3. Today, it is mid to late 80's, and bonds pay 3-5% on average for the last couple of decades.

So many economists say that a realistic number is closer to an annual withdrawal rate of 2 to 2.4%

In fact, @WadePfau said 2.4% recently. (and he's really, really smart.)
Read 5 tweets
Ron Caruthers Profile picture
5 Aug
1. How to Strategically Convert Your Traditional IRA or 401K to a Roth IRA Part One:

First off, in this thread, I'm going to explain briefly what a Roth IRA is and why you might want to convert to one, and then in the next thread, I'll show you the most efficient way to do it.
2. So....what exactly IS a Roth IRA?

Well, there are 3 phases of taxation on your money if you're saving for retirement:

1. The Contribution phase
2. The Accumulation phase
3. The Distribution phase
3. With good tax planning, you can save taxes on 2 of the 3 phases.

With a traditional IRA, SEP plan, 403b or 401k, you save money on the first 2 areas:

You don't pay taxes on your contribution, and your money grows tax free.

BUT...
Read 24 tweets
Ron Caruthers Profile picture
28 Jul
1. How procrastination robs you.

I thought you guys would enjoy a little story about what I did to myself recently.

Feel free to point and laugh, btw, but I'm willing to bet your guilty of the same.
2. I had a report to write for a client. Basically, a summary of what we had discussed.

I knew it was going to take me a couple of hours to write, and I would need to crunch a bunch of numbers to do it.

So, I put it off for WEEKS.

Literally, as long as I could
3. I finally sat down and did it.

And it took a couple of hours to do....just like I thought.

However, here is what I realized:

I had been obsessing about writing this summary everyday leading up to actually getting it done.
Read 7 tweets
Ron Caruthers Profile picture
1 Jul
1. How to select a Tax Professional Part 2

If you missed it, part 1 was a couple of days ago.

You can find it here:

2. In this part, I'll toss out a few more tips, and then tomorrow or Friday, I'll wrap up with how to avoid getting audited.

Here are a few more questions to ask a tax professional that you're thinking of using:
3. Question #11

Are your returns computerized?

Seriously, this isn't the dark ages, and manually prepared returns CAN be more likely to get flagged because people can't do math to save their lives anymore.

So, you want someone who uses computer software to prepare your stuff.
Read 18 tweets

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